Los Angeles daily herald., 1887-07-29
STANFORD
Before the Pacific Railway
Commission.
THE THURMAN Act CONDEMNED
Claims Introduced Against the
Government as a Set-Off to
the Lien on the Road.

Associated Press Dispatches to the HERALD
SAN Francisco, July 2S.-United
States Senator Leland Stanford ap-
peared in his capacity as President of
the Southern Pacific railroad before
the Pacific Railway Investigation Com
mitee to-day to answer certain inter
roYitions respecting the affairs of the
Central Pacific railroad now CONSOLE
dated with the Southern Pacific. The
government commission had pro-
pounded fifty-eight interrgatories to
President Stanford, who supplied writ
ten answers at great length and re-
viewed the history of the road and the
position it assumes with respect to the
government lien upon it.
sTANFoRD's DECLARATIONS.
Stanford primarily declares that the
Central Pacific was organized under
the laws of California, and denies that
anything in its contracts authorizes
the present investigation on the part
Of the government, but comedies a
willingness to answer any queries
which my be propounded to its Off
cials. He reviews the fact of the pub
lie agitation in 1860 and 1862 for the
construction OF a transcontinental rail-
way, and reverts to the passage of the
act of Congress for the construction of
the Union Pacific to the California
State line. In the meantime the Cen
trail Pacific bad proceeded with the
construction Of road over the Sierra
Nevada mountains, which he claims
had been regarded as impossible,
when, in order to insure
speedy construction of that road
across the continent. supplemental
act was passed by Congress authoriz-
ing the construction OF both the Union
and Central Pacific until they should
meet. Stanford makes claim that
when the roads were undertaken, the
Government was paying $4,000, 900
annually for carrying military and
Indian service supplies and the United
States mail. Stanford contends that
this compensation was to be paid to
the railroad and that it was under
stood it would never be less, and that
this compensation should be credited
to the first principle and interest of
the bonds and the company would
also pay the Government 5 per cent.
of its net earnings to apply on the
bonds. He claims that this 5000, 900
and 5 per cent. OF the net earnings
would liquidate aR she obligations to
the Government before the expiration
of tEirty-fve years. He claims that
it was reduced to point less than
that allowed to the. roads in the East.
Stanford urges q further claim that
the bonds, owing to- the war of the re-
beilion being in progress, were dis
posed, of at Il discount OF over 81 ,O00,-
00U. This discount, with interest on
the same to maturity, he computes at
$20GOD,O0O and there was also like
discount suffered in the sale of the
first mortgage bonds. fEe then re-
views the benefits bestowed by the
of the road III the devel-
opment OF the count y and speaks OF
Congressional legislation, in contrast,
as having been unduly buylensome-
he especially .inyeighs against the
Thurman act, providing for
THE SINKING FUND.
He says that this fund has been in
vested 5y the Secretary ef the Treas
ury in government bonds issued for
the constructions of Pacific railroads.
These, bonds were disposed Of by the
oompeHy at ar avezage OF about 10
cents on the dollar, at IL loss, in the
aggregate, on aie principal OF ~ .GDO,-
OO0i. The government charges inter-
est on these bonds at the rate of per
cent cn their par value. The secre-
taHy has invested the money, which
tle company has paid under the Thur
man act in these bonds, paying an
average premium therefor OF thirty
Sour per cent. There has been paid
IN by the company to the sinking fund.-
over ~, ,OOOD00, the loss on which IN
interest and premium up to .he pres
ent time is 81 $4,000. In fact, thexe
is less money i'm the sinking fund 5or
day than the amount paid in by the
company by over 100000.
LOSSES BY COMPETITION.
Stanford declares thas when the
Central Pacific road was constrSated
no rivanroad was contemplated, but
declares that the land s,zbsidies,to' the
Northern Pacific, Atlantic and Pacific
and Atchison, Topeka and Santa Fe,
were, greater than 10 the Central
Pacific, and claims that by the. COM
struction of these roads, aided by the
government, the Central and Union
Pacific roads have last $37 600, GOO in
traffic. Making a summary, Stanford
claims that by beiag compelled to sell
their bonds received from the govern
ment it entailed a loss OF $1,000, 900,
and with the ipserest added to the
maturity the amount is swelled to
500, 100000 in spupd numbers.
CLAIMS PREFERRED.
He then Claims that the govern
ment saved, from thecompletion of the
road in May 1869 down to July 1st,
1876, in the way OF transportation
nearly $4S, 100000. OF this the Cen
trail Pacific was entitled to 46 per cent,
or nearly 500, 100000. The govern
ment now owes the road for transpor-
tation, the legality of which has been
sustained by the Supreme Court, ST.
S53, 900. He also lays claim to loss
Of $780, 900 by the refusal OF the gov
ernment to grant the company patents
for its lands. The loss by tho sinking
| fund investments in the United States
treasury is placed at 81 ,6l3,0O0. Final
| ly by the loss of business due to the di-
version of other subsidized roads,
Stanford claims that the company has
sustained a loss of $4,000, 900 and
President Stanford therefore informed
the Commission that the road had a
valid claim against the government Of
a round total Of $63, 100000 to apply
against the government lien ON the
road.
GENERAL RESUME.
Taking up seriatim the questions
propounded by the Commission, Gov
l =. \ l. n Al r 4